Design Service Charges

[Kaustubh Karandikar]

XYZ exported goods without payment of GST to PQR, USA. The product design for the same was made by XYZ as per the requirement of PQR and charges for the same was separately recovered from PQR by issuing a service invoice as ‘Design Service Charges’. Is XYZ required to pay GST on the amount recovered from PQR?

AI Summary

Debate on GST Applicability for Design Service Charges Linked to Exported Goods: Are They Exempt as Export of Service? XYZ exported goods to PQR in the USA without paying GST and separately charged PQR for design services related to the goods. The discussion revolves around whether GST is applicable on these design service charges. One contributor argues that XYZ is not required to pay GST as the charges are linked to the exported goods, though proof of this connection is needed. Another suggests that even as an independent supply, the design services qualify as an export of service, thus not subject to GST. A third participant agrees with these assessments.